New-home sales improved in June, with sales of new, single-family homes eking up 0.8 percent to 610,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). The average new-home sales price was $379,500, while the median was $310,800. New-home listing inventory was 272,000—5.4 months supply.

“Although we saw modest gains this month, new-home sales have risen nearly 11 percent since the start of 2017,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB), in an NAHB Now update. “Our members remain optimistic as the single-family housing market continues to recover.”

“We saw new-home sales edge up a slight 0.8 percent in June solely because last month’s figure was revised downward, but this still reflects a recent increase in new construction resulting in new-home sales up 9.1 percent over the past year,” says Joseph Kirchner, senior economist for realtor.com®. “While that’s not enough to ease the shortage, there is some good news when it comes to new-home prices. Median sales prices dropped to $310,800 from $324,300 in May, though that’s still 3.4 percent above the same time last year. Builders have been focusing on more expensive homes, but the increase in low- to moderately-priced new-homes on the market will help millennials, first-time and moderate- to low-income homebuyers.”

“Both of June’s numbers aren’t statistically significant, so we should take them with a grain of salt,” wrote Ralph McLaughlin, chief economist at Trulia, in a Trulia Trends blog. “A less volatile number to look at is the 12-month rolling total, which is up 14.1 percent year-over-year. This represents the most since June 2008—a nine-year high.”

This year may be the most difficult in a decade to buy a home, especially for a first-time homebuyer. Prices are soaring in most markets, and for affordable starter homes, the price is rising faster than larger homes.* Supplies are suffering from a three-year inventory drought that also is hitting starter homes hardest. The number of starter and trade-up homes fell 8.7 percent and 7.9 percent, respectively, during the past year, while the inventory of premium homes has fallen by just 1.7 percent, according to Ralph McLaughlin, Trulia’s chief economist.*

There’s little leeway for mistakes in today’s marketplace. Discipline is essential, and the learning curve is stepped. Buying a home is serious business, and in most markets today, it is the most difficult step in the process for move-up buyers, as well as first-timers.

Here are five tips on house-hunting in today’s marketplace that will put you ahead of the competition and may spell the difference between success and failure.

Hire a specialist. If you had a serious medical condition, you would seek advice and treatment from a medical specialist. Real estate is also a large and complex field. Many brokers and agents specialize in delivering better service to their clients and customers. If you’re serious about finding a home today, hire a REALTOR® who specializes in serving buyers. Look for one with the designation ABR after their name. It stands for Accredited Buyer’s Representative and means that they are REALTORS® who have received specialized training from the Real Estate Buyer’s Agent Council (REBAC) and have experience representing buyers. Even if you don’t hire a specialist, you should hire a REALTOR®. Not all agents are REALTORS®; REALTORS® are members of the National Association of REALTORS® (NAR) who are licensed and abide by NAR’s Code of Ethics. Hiring a REALTOR® with an ABR designation won’t cost you anything, and a professional’s assistance could make all the difference. Above all, don’t try to go it alone today. Last year nearly 90 percent of successful buyers used an agent.**

Don’t start your search until you are ready. It’s a good idea to spend some time online surfing real estate sites and learning about real estate and checking out what’s available; however, you aren’t a serious buyer until you have done all you can to improve your credit, raised the money you need for a down payment, been pre-approved for a mortgage from at least one lender and hired an agent

Make a budget and stick to it. The amount for which your lender pre-approves you is not your budget. Your pre-approved amount is conditional and can change when you apply for a mortgage. Moreover, it does not include many of the other costs of homeownership, like taxes, home insurance and maintenance. Sit down with your agent, make your budget and stick to it. As a rule of thumb, economists recommend you spend no more than 30 percent of your gross income on housing costs. Make a pledge to yourself to stick to your budget. There are few heartaches worse than falling in love with a house you can’t afford or stretching yourself so thin that you are “house poor” for years to come.

House hunt every day. Looking for a house in today’s market is like having a second job. Financially, finding the right home may be even more important to you than a second job. The outcome of your search will determine where you live and how much you spend on housing for years to come. Be proactive with your agent to learn as much as you can about the home-buying process and conditions in your market. Spend time every day reviewing listings and learning about neighborhoods. Drive the neighborhoods in which you are interested and go to open houses to get a feel for the market and to meet listing agents who may have a home that meets your criteria. Check out “coming soon” listings to get a head start on the competition.

Use a selection of sites. Most buyers start their house search on one of the major national real estate sites like realtor.com®, Zillow or Homes.com. These sites have great features, research and how-to material. As you get more serious about finding a house, increase your selection of sites to include your local multiple listing services, if yours has a consumer site with listings (not all do). Also, bookmark several of the leading local brokerages in your market. Listings may appear earlier on a local brokerage site than a national site, and often updated information like contracts or price changes are posted first on the site of the listing broker who represents the property. Sign up for email updates of listings that fit your criteria.

Be flexible. You may find that you cannot afford to live where you would like, or you can’t afford the size or amenities you want. If those are deal-breakers for you, you may not be ready to buy in your market today—or you might revisit your plans and decide to live a little farther out from the city, buying an older house that you can improve over time. Starting out in a condo might be an acceptable alternative. Chances are prices in your market are not going to decline, and by buying now, you will begin to accumulate equity. Though mortgage rates have risen over the past year, they are still very reasonable by historical standards, which means that the odds are they will continue to rise, rather than fall, in the future. Expand the geography and price ranges on the websites you are using and see what you find.

Sweeten your offer. When you find a house on which you want to make an offer, ask your agent for a comparative market analysis (CMA) to determine its value. Don’t rely on the estimated values provided by valuation tools on real estate sites. Knowing the value is important not just for deciding how much to offer, but also to anticipate how much the house will appraise for. CMAs are based on recent sales of comparable properties, similar to appraisals. Chances are you will be competing with other buyers, including investors who pay all cash. Sellers are not only looking for the best price; they also want an offer that will close on time from a buyer whose financing won’t fall through. Consider sweetening your offer by increasing your down payment and getting more than one pre-approval. Be flexible on considerations like renting back if the owner is a move-up buyer who may need time to find a new home. If you are a move-up buyer, sell your current home before you buy a new one. Most sellers react negatively to offers that are contingent upon a buyer first selling his current home.

Don’t lose your deal. About 23 percent of contracts on homes today have a delayed settlement, and 7 percent of contracts fail to close and are terminated. The leading causes for delayed settlements are issues related to obtaining financing and appraisal issues. Among contracts that were terminated, 25 percent faced issues related to home inspections, and 20 percent had issues related to the buyer’s ability to obtain financing.*** One way to improve your odds for financing is to get more than one pre-approval so that you are ready to talk to a second lender if your first application fails. Most appraisal issues result from appraisals that come in lower than the contract price and buyers must come up with more cash. One way to protect against a low appraisal is to know the value of the house before you make an offer and make a larger down payment than you have to.

Persistence pays off. Don’t despair if a seller selects another offer over yours. Learn from your experiences. A better home may come on the market tomorrow. Last year buyers searched for an average of 10 weeks and looked at a median of 10 homes**, but that’s just a national average for all buyers. If you are a first-time buyer in a hot market, expect your hunt to take longer. Don’t quit when the weather turns cold. Fall and winter can be good times to find a home. There are fewer listings than in the spring or summer, but there’s also less competition, and sellers are usually more motivated.

The hottest housing markets have one determining factor in common: employment opportunities. Cities with jobs in growing fields draw incoming residents in droves—and none is more in-demand currently than technology. Which markets will tech next make its mark in?

A recent survey by Modis, an IT staffing services provider, identified the housing markets on set to be transformed by technology. The top 5:

1. Chicago

2. Houston

3. Boston

4. Denver

5. Philadelphia

Fifty-one percent of those surveyed ranked Chicago as the top tech hot spot of the future. The Windy City is likely to attract younger professionals who have worked in technology 5 years or less, according to the survey.

Houston and Boston ranked second and third, respectively, with 47 percent and 43 percent of the vote. Houston is likely to attract a range of professionals, from those who have not completed a college degree to those who have worked in technology for more than 10 years. Boston, like Chicago, is likely to attract younger professionals, aged 26-34.

Denver, which has seen home prices appreciate at an above-average rate since the recession, was ranked fourth at 36 percent. (Denver, as well, was recently named the No. 1 emerging tech hub by Homes.com.) Philadelphia, at 31 percent, also made the top five.

Other up-and-coming technology-driven markets, according to the survey, include Dallas, Detroit and Omaha. RISMedia Tracking Snippet *** Do Not Remove *** End RISMedia Tracking Snippet

Is the tide turning? The homeownership rate rallied slightly at 63.5 percent in the third quarter, higher than the 62.9 percent rate in the second quarter—the lowest point in more than 50 years, according to the U.S. Census Bureau’s Quarterly Housing Vacancies and Homeownership report. The third quarter homeownership rate did not differ considerably from last year’s third quarter, however, at 63.7 percent. On inventory, roughly 87 percent of housing was occupied in the third quarter, with 55.5 percent owner-occupied and 31.9 renter-occupied.

The Midwest saw the highest homeownership rates in the third quarter at 68.6 percent; the West saw the lowest, at 58.2 percent.

Homeownership rates in the third quarter were also highest among homeowners aged 65 and older, at 79.0 percent, and lowest for homeowners aged 35 and younger, at 35.2 percent.

Non-Hispanic white homeowners held the highest homeownership rate in the third quarter, as well, at 71.9 percent. Asian or Native Hawaiian and Pacific Islander homeowners held the second-highest rate at 55.6 percent. Hispanic homeowners held the third-highest, at 47.0 percent. Black homeowners held the lowest rate, at 41.3 percent—though both the Hispanic and Black rates were higher than those of last year’s third quarter.

The homeowner housing vacancy rate came in at 1.8 percent in the third quarter, while the renter vacancy rate reported 6.8 percent. Homeowner vacancy rates were highest outside metro areas at 2.5 percent, followed by inside principal cities at 1.9 percent and in suburban areas at 1.5 percent. Renter vacancy rates mirrored those of homeowners: highest outside metro areas at 9.6 percent followed by inside principal cities at 6.9 percent and in suburban areas at 6.0 percent. The median list price of vacant for-sale housing in the third quarter was $157,500.

“Optimists and pessimists alike have fodder for their cause,” wrote Trulia Chief Economist Ralph McLaughlin. “On the optimist’s side, household formation—whether it’s from new renter or new owner households—is good for both the housing market and the general economy, as some renters eventually become owners and new households drive demand for home-related goods and services. On the pessimist’s side, there are headwinds for those that want to own a home, but can’t: prices and rents have outpaced incomes, credit standards are higher, and a high share of young households are still living with their parents.

“Given other evidence from the [Census] release, my views swing more with the optimists than the pessimists.”

For more information, including tables, please click here. RISMedia Tracking Snippet *** Do Not Remove *** End RISMedia Tracking Snippet

The majority of Americans still value homeownership, but millennials face major challenges in realizing this dream, nearly a decade after the subprime crisis. Homeownership in America has taken a beating in the past few years. Eight years after the subprime crisis, homeownership remains at its lowest level in 20 years, at just over 63 percent. Does this mean the end of the American Dream of owning a home?

At first glance, the answer is no. New research from ReportLinker shows that for 80 percent of Americans homeownership remains the best investment a person can make. According to the same survey, owning a home is still the number-one, long-term financial priority for nearly 43 percent of Americans, ahead of ensuring a comfortable retirement, paying for their children’s education and leaving an inheritance.

2015 report by Gallup corroborates these figures, showing that real estate leads four others choices as the best long term investment.

Slow to leave home

The problem may stem from the reluctance of young Americans to form a household, one of the main drivers of homeownership. During these economic hard times, the share of U.S. households with more than three generations under the same roofrose significantly, and has remained high. According to the U.S. Census Bureau’s Housing Vacancy Survey, growth in the number of household averaged just 625,000 annually in 2007-2013, compared to 1.5 million in 2015. But does the fact that this decline persists at a time when mortgage rates are at their lowest in 40 years indicate a change in the way Americans view home ownership? But the picture becomes more nuanced when one looks at the importance that Americans assign to homeownership. For the general population, it is ranked in third place behind getting married and achieving educational aims in terms of life achievements in the ReportLinker’s survey. This may indicate a disconnect between the dream of owning a home and the reality of achieving it.

Millennial paradox

A closer look at the numbers shows that this disconnect is felt hardest among millennials. The slowdown in homeownership over the past several years has corresponded with the coming of age of the millennials (born 1985-2004). Compared to the general population, only 44 percent of millennials agree that homeownership is the best long-term investment, according to the recent ReportLinker research. This reticence is echoed in other research, which shows that, although the millennials are the largest generation in U.S. history, they have been slow to form households, a key indicator of future homeownership. Over the past 10 years, the number of adults under age 30 has increased by roughly 5 million but the number of households formed in that age group has risen by just 200,000. Moreover, homeownership has slipped to fourth place in the list of life achievements, coming after attaining educational and career aims and getting married, in the ReportLinker study.

Gen Y against the odds

These numbers suggest that, in an era of stagnant incomes and wage inequality, millennials put homeownership on hold while they worked to first ensure their financial security through education and career development. They’ve had to do it in an era of rising wage inequality and stagnation. The decision to form a household is closely linked to income, as the “State of the Nation’s Housing 2016” report released by Harvard University’s Joint Center for Housing Studies shows. For example, households earning under $25,000 annually—the ones that face the biggest financial hurdle to buying a home—were the fastest-growing segment in 2005-2015 and represented 44 percent of America’s net growth in households. When it comes to wage levels, the picture has been similarly morose. Today, with most measures of the labor market signaling full employment in the U.S., wage growth has remained weak. Average wage growth has fluctuated around 2 percent, unadjusted for inflation, between 2002 and 2015, according to a study by the Federal Reserve Bank of San Francisco.

Pragmatic optimism saves the day

While millennials may have borne the brunt of the aftershock of the subprime crisis, it looks like homeownership in this segment is poised to rebound. According to ReportLinker’s survey, being able to own property still remains the top priority for millennials, with 46 percent saying it was their top-ranked long-term financial goal (compared to 43 percent for the general population), which indicates pent-up demand. Moreover, nearly a decade has gone by since the subprime crisis and millennials aren’t getting any younger. As they age, they are more likely to form households, the precursor to homeownership. According to the Joint Center for Housing Studies report, millennials are expected to form well over 2 million new households each year on average in the years to come, raising their numbers from 16 million in 2015 to a projected 40 million in 2025.

Therefore, it looks like the reports of the death of America’s love affair with homeownership have been greatly exaggerated. And it’s the millennial generation who are coming to the rescue. Hardened by years of lower incomes, wage inequality, living with mom and dad, and renting, they are finally entering the market with big dreams and a clear head.

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The 15-year mortgage offers you a chance to save thousands of dollars over the life of the loan. This is because the interest rate is typically lower and amortization is half that of the 30-year loan, which means that the total interest paid on the 15-year note, as compared to a 30-year note, is significantly less because of the shorter borrowing period.

Put another way, a 15-year loan accrues principal much more quickly than a 30-year loan, so you get to own your house in half the time.

However, because you are building equity faster and paying down the loan sooner, a 15-year mortgage requires higher monthly payments.

Get a lender to help you calculate the overall savings of the 15-year loan versus the 30-year mortgage. In the end, though, base your decision on your circumstances and overall financial plan, such as whether you are nearing retirement age and also will have to shell out college expenses for children, in which case a 15-year loan may not be for you. Remember that your spending habits, budget, and financial goals should all be considered before making a final decision.

New Visa Changes Expected to Help Chinese Buy U.S. Real Estate
International investment in U.S. real estate could soar to new heights in 2015, thanks to the reciprocal U.S./China visa agreement that will issue five-year, multiple-entry visas to students and 10-year, multiple-entry visas to business travelers and tourists. The policy changes went into effect Nov. 12.

Among other effects, the new visa agreement mitigates challenges for those investing in property abroad—namely, real estate purchased by Chinese parents for children studying in the U.S. For students participating in four-year degree programs, the five-year extension presents a welcome change.

“Chinese individuals on the fence about investing in the U.S. are encouraged by the new visas,” says Andrew Taylor, co-CEO and co-founder of Juwai.com, a global real estate information platform serving the world’s Chinese communities. “They make a big headache go away.”

Barring outside factors, Taylor predicts at least a 15 percent increase in Chinese investment in 2015. According to the NAR 2013 Profile of International Home Buying Activity, China and Canada have been the fastest growing sources of international clients. Transactions involving Chinese buyers account for 12 percent of total reported international transactions, with many opting for all-cash purchases.

“Mainland Chinese buyers have the highest average price range and pay in cash about 70 percent of the time,” Taylor says. Juwai users report an average budget of $3 million and a median property purchase price of $425,000—well above the overall U.S. median of $199,500. Top areas for real estate investment include New York City, Los Angeles, Philadelphia, Detroit and Houston.

For real estate practitioners, the new visa policy imparts an opportunity to carve out a global niche. Chinese clients, like any other client, seek an agent that maintains high standards of professionalism.

“International buyers have an exceptionally strong bond to their agent,” notes David Lauster, real estate specialist, U.S. State Department, in the Sept. 2014 issue of Real Estate magazine. “They display an admirable and long-lasted appreciation for the assistance and knowledge that agent brings to the transaction.”

That assistance and knowledge trumps all – including specialized skill sets. Fluency in a second language, for example, is not necessarily required.

“One of the biggest questions I get is, ‘Do I have to learn Mandarin?’ The answer is no,” Taylor says. “Just do your job well. That’s enough.”

“No special qualifications are needed,” says Noah Seidenberg, broker associate with Coldwell Banker Evanston in Evanston, Ill. Evanston is home to one of Northwestern University’s campuses, which collectively house over 5,000 international students, faculty, researchers, visiting scholars and staff from more than 110 countries. Seidenberg receives inquiries from foreign buyers on a regular basis, particularly during peak enrollment periods at the university.

“The process legally is often not the same in the U.S. as it is when purchasing property and obtaining title in their native country, so there is a period of explanation, walking the person through the steps, much like a first-time buyer,” Seidenberg adds.

With the policy changes propelling an already emerging segment, Taylor recommends taking advantage of the boost with a two-fold approach:

Brand services on a global level.
Make it known that you market listings in China. “Home sellers read the news, and they want the best price. Show them you’re best equipped to get it for them because you are marketing to their largest, biggest spending and fastest growing group of overseas buyers.”

Prioritize international marketing.
Initiate a dialogue by reaching out to Chinese buyers. “Make international marketing a basic part of your business that you attend to every day or week, just like you do with cold calls, mail-outs or community marketing.”

Given the existing correlation between the number of Chinese students educated in American schools and Chinese investment in U.S. real estate, the student visa extension may have a much more immediate impact on the U.S. housing market than the business traveler and tourist visa changes. By taking these steps, U.S. real estate professionals will lay the foundation for long, productive relationships with international buyers.

“Every [Chinese] family has its own situation,” Taylor explains, “but underlying all of them is a faith in the U.S. real estate market and a desire to own their part of it.”

This blog is about the Energy Corridor in Houston Texas. The Energy Corridor is defined by the many oil industry related companies ranging in size from large corporations to one man independent companies mixed in with residential neighborhoods, restaurants, and parks.The neighborhoods in the Energy Corridor are bordered by almost 26,000 acres ... Continue reading →